Should I hire a property management company? (tenants, incentive, plumber)
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I've seen some people who own multiple rental properties and some expand their holdings and I was interested in how these people manage their properties? Do they hire resident managers or pay for the services of a property management companies?
By the way I have zero experience in managing properties but I would like to learn and get involved in real estate investing and maybe even develop it. How should I go about doing this?
I reluctantly advise against hiring a property manager to look after your property.
In a perfect world it makes sense to hire an expert who knows all the ins and outs of property management. The big problem is that few of them are honest or competent. What incentive do they have to do much for you if they got an initial fee upfront to take your property on? They already got paid upfront, and ongoing management takes the fee out of any rent paid before you see anything from a tenant.
They can move in deadbeat tenants that tear your house up and there's no recourse. They can bill you for maintenence and repair work that wasn't done. They can even claim the tenant paid no rent, while pocketing it for themselves on the sly.
When you sign a management agreement you're basically tossing the keys to your house to a manager and crossing your fingers that it'll all somehow work out.
The money you pay in management fee's will buy a lot of time in a lawyers office if issues do come up.
You're better off to do it yourself and screen tenants ruthlessly. This is the number one key to managing property. Done properly, you won't have problems or need a manager in the way.
If you're near your properties manage them yourself. I had a PMC. Wasn't a good experience. I know of one PMC I would hire if I were to move out of state. Until that happens I'll keep doing it myself. I like the fact I know who lives in my properties.
I reluctantly advise against hiring a property manager to look after your property.
In a perfect world it makes sense to hire an expert who knows all the ins and outs of property management. The big problem is that few of them are honest or competent. What incentive do they have to do much for you if they got an initial fee upfront to take your property on? They already got paid upfront, and ongoing management takes the fee out of any rent paid before you see anything from a tenant.
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Then how do wealthy landlords ever take month long vacations?
Then how do wealthy landlords ever take month long vacations?
LOL I have never taken a month long vacation. But I simply let the tenants know I will be gone for a week or so and I have a friend who can be called on if there is a issue. I pay him $250 for being on call for me. I also call my plumber and handyman and tell them. They know to go do the repair and give me the bill when I get back. I never had issues but the mechanism is in place if I can't respond someone will.
Someday I'll become a huge conglomerate corporation I'll call it Whitestone with far reaching international ties and treat my tenants like crap and take their money mmmmuuuaaahhhaaahhhaaa but until then I guess I'll have to treat them like human beings instead of ATMs. Once I reach that goal watch out. And I'll be able to take a TWO month vacation maybe three. Yeah that's the ticket.
To the ones that will probably take my second paragraph seriously its a joke.
Its a simple math problem. Profit margin. If you have owned a house for years and its paid for, its quite easy to hire a mgmt company because your expenses are so low. No mortgage. And since you have experience already, you know how to run a rental and what things cost.
Now if you go out and buy a house today, with a mortgage, your profit margin will be really low. If your mortgage is $1200 a month and local rents are $1300 month, you have no money to hire a mgmt company and you will actually loose money because of maintenance, insurance, taxes, etc. Landlording isn't rocket science, but if you have no idea what your doing, your going to loose money.
The profit margin's are not as good as the TV commercials claim they are. Landlords are foreclosed on regularly because they have no idea what they are doing.
As a renter I despise property management companies because so many have a condescending attitude so I much prefer dealing with an owner directly.
However, if the owner lives out of town I think they need a PM; I have run into problems with landlords trying to get by on the cheap like that.
They ask the tenant or other unqualified people to take up their slack and it is unfair and improper.
Current landlord actually left the country for months and some 'caretaker' introduced himself; (I'm starting a thread about how landlords should need certification.)
Nutshell; if managing those properties yourself is all-consuming and takes the joy out of life; makes perfect sense to get professional help; just check them out carefully.
As a renter I despise property management companies because so many have a condescending attitude so I much prefer dealing with an owner directly.
However, if the owner lives out of town I think they need a PM; I have run into problems with landlords trying to get by on the cheap like that.
They ask the tenant or other unqualified people to take up their slack and it is unfair and improper.
Current landlord actually left the country for months and some 'caretaker' introduced himself; (I'm starting a thread about how landlords should need certification.)
Nutshell; if managing those properties yourself is all-consuming and takes the joy out of life; makes perfect sense to get professional help; just check them out carefully.
I prefer dealing with the tenant directly also. At the most I have a friend who is a person to get in touch with if something happens and I'm on vacation/out of state type of scenario. Otherwise my cellphone literally stays on 24 hrs a day. I'm Aldo the on call tech fir my company so I'm always in touch.
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